Yielding to government's stance, the Reserve Bank today allowed corporates and PSUs with sound credentials and Rs 500 crore capital to set up commercial banks under new guidelines that may also open the doors for the Postal Department and insurance behemoth LIC.
The norms issued by the RBI after a gap of more than a decade will see companies like Mahindra and Mahindra, Tatas, Anil Ambani Group and Religare queuing up for a bank licence.
"Entities/groups should have a past record of sound credentials and integrity, be financially sound with a successful track record of 10 years," it said, adding, RBI would seek feedback about applicants from other regulators, enforcement and investigative agencies like I-T Department, CBI, ED, as deemed appropriate.
The minimum paid-up capital for setting up a bank has been pegged at Rs 500 crore. The cap on the foreign investment, including FDI/FII and NRI, has been set at 49 per cent.
Those seeking to set up a bank would have to submit applications by July 1, 2013. According Financial Services Sector Secretary Rajiv Takru, the first licence will be issued by the end of March 2014.
"There would be examination of applications (by RBI and a high powered committee). I think with all going well, with all clearances, by end of the financial year (2013-14) we will see some success," he said.
The final guidelines which comes within two months of the passage of the Banking Laws Amendment Bill empowering RBI to supersede the board of banks among other things.
Although the Finance Ministry wanted the RBI to issue the norms and start accepting applications pending the passage of the amendment Bill, the RBI decided to stick to its position and waiting for the legislative changes.
The announcement to give new bank licences to corporate entities was made by the then Finance Minister Pranab Mukherjee in February 2010.
